Red River Bancshares, Inc. · NASDAQ:RRBI
Red River Bancshares — September Conferences 2023
43 slides from Red River Bancshares's conference presentation, Sep 13, 2023
Slide 1: Investor Presentation September Conferences
INVESTOR PRESENTATION September Conferences As of June 30, 2023 Nasdaq: RRBI Exhibit 99.1
Slide 2: Forward-Looking Statements and Non-GAAP Information
Forward-Looking Statements and Non-GAAP Information Statements in this presentation regarding our expectations and beliefs about our future financial performance and financial condition, as well as trends in our business and markets, are “forward-looking statements” within the meaning of Section 27A
Slide 3: Glossary of Terms
Glossary of Terms ■ 1Q22 – First Quarter of 2022 ■ 2Q22 – Second Quarter of 2022 ■ 3Q22 – Third Quarter of 2022 ■ 4Q22 – Fourth Quarter of 2022 ■ 1Q23 – First Quarter of 2023 ■ 2Q23 – Second Quarter of 2023 ■ 3Q23 – Third Quarter of 2023 ■ 4Q23 – Fourth Quarter of 2023 ■ 1H23 – First Half of 2023 ■
Slide 4: Strong. Stable.
Strong. Stable. We’re your people. ae RED RIVER BANK n Member redriverbank.net FDIC
Slide 5: Company Overview
■ Established in 1998 in Alexandria, Louisiana ■ Completed IPO in May 2019 ■ Nasdaq: RRBI ■ Included in Russell 2000 Index ■ As of June 30, 2023: ■ Assets = $3.03 billion ■ Loans HFI = $1.95 billion ■ Securities = $739.0 million ■ Deposits = $2.66 billion ■ Market capitalization = $352.6 million ■ O
Slide 6: Company Strengths
Company Strengths ■ Consistent, long-term track record of financial results and steady growth ■ Conservative credit culture with solid asset quality ■ Granular, diversified, relationship-based loan and deposit portfolios ■ Solid liquidity position ■ No internet-sourced or brokered deposits ■ Minimal
Slide 7: Red River Bancshares, Inc.
estes eee GO RED RIVER BANCSHARES, INC,
Slide 8: Company History
Company History Completed first stock offering of $12.4M Red River Bank opened in Rapides Parish Completed stock offering of $4.0M Acquired Bank of Lecompte in Central Louisiana Expanded into Northwest Market via banking center, and completed stock offering of $5.0M Completed stock offering of $7.4M
Slide 9: Book Value Growth
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2Q23 0.00 5.00 10.00 15.00 20.00 25.00 30.00 35.00 40.00 45.00 50.00 55.00 Book Value Growth Note: Each year on the Book Value Graph represents year-end financial data. 1Non-GAAP m
Slide 10: Leadership Team
Leadership Team 10 R. Blake Chatelain ■ President, Chief Executive Officer, and Director ■ Founding management ■ Previously Executive Vice President of Rapides Bank & Trust Company, a subsidiary of First Commerce Corporation ■ B.S. in Finance from Louisiana State University Isabel V. Carriere, CPA,
Slide 11: Growth Strategies
Growth Strategies De Novo Growth Strategies ■ Disciplined, targeted investments for smart growth ■ Target markets with significant disruption by competitors ■ Concentrate on urban markets with growth potential ■ Focus on markets where market share is held by large national and regional banks ■ Hire
Slide 12: Guiding Principles - Relationship-Based Lending
Guiding Principles - Relationship-Based Lending Conservative Credit Culture ■ Our founding management team developed the initial credit culture, predicated upon conservative underwriting principles carried over from regional bank experience. This same team has overseen the implementation and periodi
Slide 13: Strategies and Recent Systems
Strategies and Recent Systems ■ Robust commercial treasury systems ■ P2P payments platform provided by Zelle® ■ Online and mobile banking channels: mobile deposit, digital receipts, Apple Pay, mobile wallet, and debit card controls ■ Launched redesigned, contactless debit cards ■ Online deposit acco
Slide 14: Competitive Landscape
Competitive Landscape BankPlus 0.9%Investar Bank 1.1% Home Bank 1.7% Red River Bank 2.0% Origin Bank 2.0% b1BANK 2.7% First Horizon 6.0% Regions 6.5% Hancock Whitney 12.5% Capital One 17.2% JP Morgan Chase 17.8% Others 29.6% ■ Red River Bank holds 2.0% of Louisiana deposits1 ■ 60.0% of Louisiana dep
Slide 15: Red River Bancshares, Inc.
EOE ve an 2 RED RIVER BANCSHARES, INC.
Slide 16: 2022 Financial and Operational Highlights
(dollars in thousands, except per share data) For the Year Ended 12/31/22 12/31/21 Assets $ 3,082,686 $ 3,224,710 Non-PPP Loans HFI1 $ 1,916,253 $ 1,666,282 Deposits $ 2,798,936 $ 2,910,348 Stockholders’ Equity $ 265,753 $ 298,150 Book Value Per Share $ 36.99 $ 41.52 Tangible Book Value Per Share1 $
Slide 17: 2022 Selected Income Comparison
(dollars in thousands) For the Year Ended Variance 12/31/22 12/31/21 $ % Interest and Dividend Income, excluding SBA PPP1 $ 93,705 $ 71,566 $ 22,139 30.9 % SBA PPP Loan Income 670 5,773 (5,103) (88.4) % Total Interest and Dividend Income $ 94,375 $ 77,339 $ 17,036 22.0 % Interest Expense 7,736 5,617
Slide 18: Second Quarter 2023
ereond Quarieeas G2 RED RIVER BANCSHARES, INC.
Slide 19: 2Q23 Financial Highlights
(dollars in thousands, except per share data) 2Q23 1Q23 2Q22 Net Income $ 8,968 $ 9,598 $ 9,147 EPS, Diluted $ 1.25 $ 1.33 $ 1.27 Book Value Per Share $ 39.49 $ 38.54 $ 35.34 Tangible Book Value Per Share1 $ 39.28 $ 38.33 $ 35.12 Realized Book Value Per Share1 $ 49.21 $ 48.09 $ 44.23 Cash Dividends
Slide 20: Balance Sheet
As of (dollars in thousands) 6/30/23 3/31/23 12/31/22 ASSETS Cash and due from banks $ 36,662 $ 34,491 $ 37,824 Interest-bearing deposits in other banks 185,409 194,727 240,568 Securities AFS, at fair value 588,478 611,794 614,407 Securities HTM, at amortized cost 146,569 149,417 151,683 Equity secu
Slide 21: Liquidity and Borrowing Availability
Liquidity and Borrowing Availability 21 26.0% 25.0% 25.2% 25.2% 24.4% 11.4% 9.8% 9.0% 7.6% 7.3% Total Securities Liquid Assets 2Q22 3Q22 4Q22 1Q23 2Q23 Liquidity ■ Liquid Assets1 = $222.1 million, or 7.34% of assets, as of 6/30/23 with $182.0 million average for 2Q23 ■ Securities AFS pledged to secu
Slide 22: Key Securities Metrics
Key Securities Metrics as of June 30, 2023 ■ Securities AFS portfolio at fair value = $588.5 million, net of $73.0 million unrealized loss ■ Securities HTM portfolio at amortized cost = $146.6 million ■ Unrealized loss on HTM portfolio = $22.1 million ■ 2Q23 yield = 1.76% ■ Effective duration = 5.0
Slide 23: Deposits
■ Deposits were $2.66 billion for 2Q23, a decrease of $67.2 million, or 2.5%, compared to 1Q23, due to the changing interest rate environment impacting customer deposit movement and activity, combined with normal tax payments ■ Noninterest-bearing deposits to deposits ratio = 37.14% ■ Loans HFI to d
Slide 24: Deposit Portfolio Details
■ Granular, diversified deposit portfolio and customer base throughout Louisiana ■ Average deposit account size = $27,000 ■ Public entity deposits ■ Relationship-based Louisiana public entities ■ Public entity deposits = $171.2 million, 6.4% of deposits ■ IntraFi Network ICS Reciprocal Deposit Progr
Slide 25: Loan Portfolio Overview
Loan Portfolio Overview ■ Loans HFI = $1.95 billion ■ Broad diversification by industry ■ Highest industry concentration = Health Care at 8.2% ■ Average loan size excluding credit cards = $237,000 25 8.2% 4.8% 3.8% 3.7% 3.3% 2.5% 1.9% 1.8% 1.4% 1.1% Health Care Investor 1-to-4 and Multifamily Retail
Slide 26: Health Care Loans
Health Care Loans 26 Nursing & Residential Care Facilities 4.0% Physicians & Dental Practices 4.1% Hospitals 0.1% ■ Largest industry concentration ■ Health Care loans = $159.6 million, or 8.2%, of loans HFI ■ Average loan size = $338,000 ■ No shared national credits, real estate investment trusts, o
Slide 27: Commercial Real Estate Loans
Commercial Real Estate Loans 27 Commercial Construction 5.8% Residential Construction 1.3% Owner Occupied CRE 20.6% Non-Owner Occupied CRE 21.5% ■ CRE = $819.3 million, or 42.1% of loans HFI ■ Investor-owned office properties = $56.3 million, or 6.9% of CRE ■ C&D = $138.5 million, or 7.1% of loans H
Slide 28: CECL Update
CECL Update Adopted CECL methodology as of January 1, 2023 1Q23 Impact ■ $278,000 increase to ACL ■ Established a $442,000 reserve for unfunded commitments ■ Combined 3.5% increase to December 31, 2022 allowance for loan losses ■ One-time $569,000, net of tax, decrease to stockholders’ equity ■ No p
Slide 29: Loans by Market
■ Expanding operations in Southwest, Acadiana, Northshore, and Capital Markets ■ Opened an LDPO and a full-service banking center in the New Orleans Market Opportunities and Challenges to Future Loans Opportunities ■ Expansion in larger Louisiana markets ■ Competitor disruption ■ New lender capacity
Slide 30: Asset Quality
Asset Quality ■ NPAs decreased slightly to $2.0 million ■ NPAs to Assets = 0.07% ■ Provision expense totaled $300,000 in 2Q23 ■ ACL to loans HFI = 1.08% ■ Net charge-offs to average loans since Red River Bank’s opening in 1999 = 0.06% 30 0.03% 0.09% 0.08% 0.08% 0.07% 2Q22 3Q22 4Q22 1Q23 2Q23 (dollar
Slide 31: Capital
Capital 31 ■ Well capitalized position ■ Includes $69.7 million of net unrealized losses on securities AFS and HTM, 24.6% of capital as of June 30, 2023 ■ Stock repurchase programs ■ Repurchase Program renewed February 4, 2022 for $5.0 million and expired December 31, 2022 ■ 2022 – Repurchased 4,465
Slide 32: Stockholders' Equity Trends
Stockholders’ Equity Trends 32 $284.9 $292.9 $298.7 $298.2 $264.9 $253.6 $243.4 $265.8 $276.6 $283.4 Q1 Q2 Q3 Q4 $240.0 $260.0 $280.0 $300.0 Total Stockholders’ Equity (dollars in millions) $285.2 $291.9 $298.7 $301.9 $308.7 $317.4 $327.2 $336.9 $345.2 $353.1 Q1 Q2 Q3 Q4 $280.0 $300.0 $320.0 $340.0
Slide 33: Profitability Trends
Profitability Trends 33 $18,566 $24,824 $28,145 $32,952 $36,916 Q1 Q2 Q3 Q4 2019 2020 2021 2022 1H23 Net Income (in thousands) $2.58 $3.49 $3.83 $4.51 $5.13 Q1 Q2 Q3 Q4 2019 2020 2021 2022 1H23 Earnings Per Share (Diluted) 59.46% 55.77% 56.39% 56.60% 57.74% 2019 2020 2021 2022 1H23 Efficiency Ratio
Slide 34: Net Interest Margin FTE (2Q23 vs. 1Q23)
Net Interest Margin FTE (2Q23 vs. 1Q23) 34 ■ NIM FTE decreased 17 bps to 2.96% for 2Q23 due to higher deposit rates resulting from deposit rate pressures ■ Increased selected deposit rates to retain and attract customers ■ Customers moved deposits from lower yielding accounts to higher yielding acco
Slide 35: Net Interest Margin Update
Net Interest Margin Update 35 NIM Opportunity ■ Deploy investment cash flows into higher yielding assets ■ Increase loan yield ■ Floating rate loans are 13.3% of loans HFI ■ 9.4% of the loan portfolio will reprice in 2H23 ■ 11.6% of the loan portfolio will reprice in 2024 ■ Growth opportunity in new
Slide 36: Noninterest Income (2Q23 vs. 1Q23)
Noninterest Income (2Q23 vs. 1Q23) 36 ■ Noninterest income increased $1.7 million to $6.0 million for 2Q23 ■ SBIC income increased $1.2 million to $1.4 million for 2Q23 due to the sale of an investment by the SBIC ■ We expect this income to be lower in future quarters ■ Mortgage loan income increase
Slide 37: Operating Expenses
Personnel $9,547 59.2% Occupancy & Equipment $1,554 9.6% Technology $642 4.0% Data Processing $638 4.0% Other Taxes $693 4.3% Legal & Professional $580 3.6% Regulatory Assessment $397 2.5% Operating Expenses For the quarter ended June 30, 2023 (dollars in thousands) Other Operating $2,081 12.8% ■ Op
Slide 38: Expansion Highlights
Expansion Highlights 38 Southwest Market – Lake Charles, Louisiana ■ 3Q22 – Expanded the Country Club Banking Center with a 3,600 square-foot addition ■ 1Q23 – Closed Lake Street and consolidated staff to the Country Club Banking Center Acadiana Market – Lafayette, Louisiana ■ 1Q22 – Remodeled and o
Slide 39: Strategic Outlook
Strategic Outlook ■ Continue building a strong, Louisiana-based, super-community bank by leveraging existing infrastructure and creating strong brand loyalty ■ Continue disciplined capital management ■ Focus on liquidity ■ Manage deposit pricing due to intensified rate pressure ■ Manage net interest
Slide 40: Summary: Well positioned for the future
Granular, diversified deposit portfolio Diversified loan portfolio with good asset quality Well capitalized with 11.48% leverage ratio as of June 30, 2023 Summary Well positioned for the future 40 Stockholders’ equity to assets = 9.36% Tangible common equity to tangible assets1 = 9.31% Strong liquid
Slide 41: Appendix
ae RED RIVER BANCSHARES, INC. APPENDIX
Slide 42: Non-GAAP Reconciliation
As of (dollars in thousands, except per share data) 6/30/23 3/31/23 12/31/22 6/30/22 12/31/21 Tangible common equity Total stockholders’ equity $ 283,372 $ 276,640 $ 265,753 $ 253,596 $ 298,150 Adjustments: Intangible assets (1,546) (1,546) (1,546) (1,546) (1,546) Total tangible common equity (non-G
Slide 43: Non-GAAP Reconciliation (continued)
As of (dollars in thousands) 9/30/22 6/30/22 3/31/22 Realized common equity Total stockholders’ equity $ 243,413 $ 253,596 $ 264,874 Adjustments: Accumulated other comprehensive (income) loss 83,744 63,804 43,819 Total realized common equity (non-GAAP) $ 327,157 $ 317,400 $ 308,693 Non-GAAP Reconcil